Over 100 UK companies operate in Argentina. This includes over 30 FTSE 100 companies such as BT, GSK, HSBC and Unilever. There is a range of small and medium sized UK companies in Argentina.

Benefits for UK businesses exporting to Argentina:

high level of professional skills, including highest English Proficiency Index in region

sophisticated market with European tastes and business culture

direct daily flights with the UK

member of MERCOSUR trading bloc

Strengths of the Argentine market include:

major world producer of agricultural commodities

unexploited shale oil and gas reserves

large reserves of minerals and precious metals

second largest manufacturing capability in South America

2. Challenges

There are some unique challenges that UK companies may face when doing business in Argentina. These include:

import restrictions

high inflation (over 20%)

high cost of labour and social costs related to labour

disagreements over UK sovereignty of the Falkland Islands

3. Growth potential

3.1 Economic growth

Argentina grew at an average rate of 4.6% between 2004 and 2014. Since then, growth has slowed and some economists predict a light recession for 2016 caused both by domestic as well as international issues. The downturn in the Brazilian economy will be one of the main factors as Brazil is Argentina’s largest export destination.

Despite these challenges, Argentina has a natural resource base with high growth potential:

top 5 world producer of agricultural commodities such as soya and maize

world’s third largest deposits of shale gas and fourth of shale oil

under exploited reserves of lithium, copper, gold and silver

regional leader in IT services and creative industries

second strongest industrial sector in South America

4. UK and Argentina trade

In 2015, Argentina was the UK’s fourth largest export market in South America. UK exports of goods were worth £289 million. This figure has fallen in recent years due to import restrictions and the slowdown in the Argentine economy.

Top 10 UK exports to Argentina are:

medical equipment and pharmaceuticals

boilers, machinery and mechanical appliances

non ferrous metals

professional and scientific instruments

plastics and plastic products

beverages

electrical machinery and equipment

chemical materials and products

vehicles

organic chemicals

5. Opportunities for UK businesses in Argentina

Department for International Trade (DIT) provides free international export sales leads from its worldwide network. Search for export opportunities.

5.1 Education

Argentina has the highest English language proficiency in Latin America. English is mandatory at state schools in the City of Buenos Aires and the Province of Buenos Aires. Many private schools are bilingual and attract many middle class students.

4.9 million netbooks have been given to children through the government programme ‘Conectar Igualdad’.

There is demand for:

educational software

English Language Teaching (ELT) products

joint ventures with local institutions for corporate and higher education programmes

Contact the trade and Investment Advisor marisa.leoncini@fco.gov.uk for more information about opportunities in the education sector.

5.2 Agri-tech

Argentina is one of the greatest food producing and food exporting countries of the world. It has 36 million hectares of arable and permanent cropland. Agriculture production and the food and drink industry make up 16% of Gross Domestic Product (GDP). 70 to 95% of Argentina’s export earnings are traditionally supplied from agriculture and farming.

Contact the Trade and Investment Advisor marisa.leoncini@fco.gov.uk for more information about the opportunities in the agri-tech sector.

5.3 Healthcare

Argentina has one of the highest doctor to population ratios in Latin America (3.8 per 1,000 inhabitants). The Argentine healthcare system is split into 3 distinct markets:

Public Health Service for 17 million people

Social Security for 18 million people

Private Health Service for 4.6 million middle-high income users

Argentina is the second largest market in Latin America for medical devices. However, only 25% of the equipment is manufactured locally. There is demand for:

imaging diagnostic equipment

orthopaedic implants

cardiology surgery supplies

in-vitro and organ transplant instruments

telemedicine and other top end solutions

Contact the trade and Investment Advisor marisa.leoncini@fco.gov.uk for more information about opportunities in the healthcare sector.

5.4 Oil and gas

Argentina is one of the top 3 countries in the world for reserves of shale oil and gas. It is estimated that 27 billion barrels of shale oil and 800 trillion cubic feet of shale gas are recoverable.

There will be demand for new equipment and specialist services as the sector develops. These include:

geoscience and geology

fracking

drilling

environmental protection

health and safety

Contact the Head of Department for International Trade (DIT) in Buenos Aires tim.hanson@fco.gov.uk for more information about pportunities in the oil and gas sector.

5.5 Experience sector

Argentina has more than 1000 museums, some already world class. Most of these are owned by federal or provincial governments.

There are opportunities for UK companies in:

planning museums and cultural districts

hosting international exhibitions

training in modern museum techniques and concepts, including self sustainability

Contact the Trade and Investment Advisor fabiana.cabral@fco.gov.uk for more information about opportunities in the experience sector.

5.6 Information and Communications Technology (ICT)

Argentina is an early adopter of ‘big data’ and other sophisticated technologies. It has the highest number of mobile phones per capita in the Americas and higher also than the UK. Its fibre-optic broadband network will increase by 300% by end 2015.

Contact the Deputy Head of Department for International Trade (DIT) in Buenos Aires alfredo.fierro@fco.gov.uk for more information about the opportunities in the ICT sector.

5.7 Urban security

With public security rising up the political, corporate and domestic agendas, the market is expected to grow stronger. Drugs production and trafficking is on the increase, as is organised and common crime.

Given Argentina’s relatively large and well established manufacturing capability, the main opportunities are in:

high tech systems

sophisticated services (particularly capacity building)

niche products that are not available from local manufacturers (particularly in the electronic and IT areas)

There are specific opportunities in:

video monitoring, access control, and intruder and fire detection

police systems, services and training

banking security systems and services

electronic tagging of prisoners

The Export Control Organisation (ECO) issues licences for the export of strategic goods. You must check that your goods meet the legal requirements for export.

Contact the Senior Trade and Investment Officer sonia.apontetinao@fco.gov.uk for more information about opportunities in the urban security sector.

5.8 Mining

Opportunities in the mining sector are increasing in Argentina due to:

changes in legislation

more stable financial environment

Argentina has 10 projects totalling USD 10 billion in investments likely to move into their construction phase in the next 12 months. Most of these are for hard rock mining for metals, mainly copper and gold.

Argentina has a relatively large and well established manufacturing capability in this sector so the main opportunities are in:

crushers

vibrating meshes

chemicals

construction machinery/vehicles

consultancy and support services

UK companies might wish to consider partial local manufacturing to reduce transport and other costs.

Contact the Deputy Director of Trade and Investment alfredo.fierro@fco.gov.uk for more information about opportunities in the mining sector.

6. Start-up considerations

You can start operations in Argentina through a local agent or by setting up your own company. This company may take different legal forms:

corporation

branch

partnership

joint venture

sole proprietorship

The advantages and disadvantages of each will depend on your operation. Setting up a company is normally straight forward and can be done within one month.

7.1 Intellectual property

You should patent your inventions and register trademarks in Argentina. Applications can be made through a patent or trademarks agent in either the UK or Argentina. Problems with patents and trademarks can sometimes occur.

8. Tax and customs considerations

8.1 Tax

Argentine tax laws are complex and change often. You should seek professional advice if you are opening a subsidiary or exporting services.

Some payments may be withheld in lieu of taxes when exporting goods. You can usually deduct this from tax liabilities in the UK.

The UK has a double taxation agreement with Argentina. This allows some taxes paid in one country to be deducted in the other.

8.2 Customs

Argentine Customs use the Harmonised System (HS) for classification of goods. Import duties are based on the Cost, Insurance and Freight (CIF) value.

The new Argentine government implemented a new import regime on 23 December 2015 called SIMI.

The new regulations divide all customs codes into 2 categories: automatic import licences and non-automatic licences. Under the new import regime it’s expected that most licences will be granted unless there are issues around ‘dumping’.

The following are now excluded from the requirement of non-automatic licences:

commercial samples

donations

goods imported under diplomatic franchises

imports duty paid from the Tierra del Fuego special Economic Area

imports via courier and postal system if deemed to be for personal use

The new regime will also include an informal quota system for some products such as cars and other vehicles.

There are restrictions on access to foreign currency to pay imports. Your representative in Argentina must get approval from the tax authorities first.

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